SEVERANCE AND TERMINATION AGREEMENT
AGREEMENT, dated as of October 22, 1997, by and between XXXXXXX XXXXXXX
JEWELERS, INC., a Delaware corporation (the "Corporation") and XXXX XXXXX (the
"Executive").
* * * * *
WHEREAS, the Corporation considers the establishment and maintenance of
a sound and vital management to be essential to protecting and enhancing the
best interests of the Corporation's stockholders;
WHEREAS, the Corporation desires to induce the Executive to provide
services to the Corporation, and the Executive desires to furnish such services
to the Corporation;
NOW THEREFORE, in consideration of the Executive's agreement to provide
services to the Corporation, the parties hereto agree as follows:
1. EMPLOYMENT AT WILL; TERMINATION. Executive shall be an employee at
will of the Corporation, and the Corporation may terminate the Executive's
employment at any time, but only after the Corporation provides compensation for
the benefits hereinafter specified in accordance with the terms hereof.
2. TERMINATION WITHOUT CAUSE.
(a) If the Corporation shall terminate the employment of the
Executive without Cause, then the Executive shall be entitled to the benefits
provided in Paragraph 3 hereof.
(b) "Cause" shall mean:
(i) the conviction of Executive of a crime involving
moral turpitude or any act(s) or omission(s) on
the part of the Executive of fraud, dishonesty
or willful misconduct in connection with the
performance of his duties and responsibilities
as an officer and employee of Corporation, which
-1-
act or acts would, if prosecuted, constitute a
crime; or
(ii) the willful engaging by Executive in gross
misconduct materially injurious to the
Corporation.
For purposes of this Paragraph 2(b), no act, or failure to act, on the part of
the Executive shall be considered "willful" unless done, or omitted to be done,
by the Executive not in good faith and without reasonable belief by the
Executive that such action or omission was in the best interest of the
Corporation.
(c) Notwithstanding anything to the contrary, Executive's
employment with the Corporation will be terminated as a result of his death or
Permanent Disability. For the purpose of this Paragraph 2(c), "Permanent
Disability" shall be deemed to occur after 180 days in the aggregate during any
consecutive twelve-month period, or 135 consecutive days, during which 180 or
135 days, as the case may be, the Executive, by reason of his physical or mental
disability or illness, shall have been unable to perform his essential duties
and responsibilities as an officer and employee of the Corporation in any
material respects.
3. SEVERANCE EVENTS; CERTAIN BENEFITS UPON TERMINATION. If on or before
October 22, 2000, the Corporation shall terminate the employment of the
Executive without Cause (such event hereafter referred to as a "Severance
Event"), the Executive shall be entitled to the following payments or benefits:
(i) Payment by the Corporation of the Executive's base salary
through the effective date of the Severance Event
("Severance Event Effective Date") and for three months
thereafter; and
-2-
(ii) The Corporation shall maintain in full force and effect
for the Executive at the Corporation's expense for a
three-month period after the Severance Event Effect Date,
all employee benefit plans and programs or arrangements in
which Executive had been entitled to participate
immediately prior to the Severance Effective Date,
provided that the Executive's continued participation is
possible under the general terms and provisions of such
plans and programs. In event that the Executive's
participation in any such plan or program is not possible,
the Corporation shall arrange shall provide the Executive
with benefits substantially similar to those which
Executive was entitled to receive under such plans and
programs.
Executive agrees to sign a General Release of the Company as a condition of
receiving such severance payments and benefits.
5. TERM OF AGREEMENT. This Agreement shall expire three years after the
date hereof. Following the expiration of this Agreement, the Executive, upon the
termination of his employment by the Corporation, shall be entitled to such
severance payment, if any, made available to similarly situated executives of
the Corporation, for their termination under substantially similar
circumstances.
6. NOTICES. Any notice to be given under this Agreement shall be
personally delivered in writing or shall have been duly given on the fifth day
after it has been posted in the United States mails, postage pre-paid,
registered or certified, return receipt requested, and if mailed to the
Corporation shall be addressed to:
Xxxxxxx Xxxxxxx Jewelers, Inc.
000 Xxxxx XxxXxxxxxx Xxxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attn: Chief Executive Officer
-3-
and, if mailed to the Executive, shall be addressed to:
Xxxx Xxxxx
00 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
7. MODIFICATION. This Agreement, taken together with that certain
letter dated October 15, 1997 to Executive from Xxxxxxx Xxxxxxxxx, sets forth
the entire understanding of the parties with respect to the subject matter
hereof, supersedes all existing agreements among and concerning such subject
matter and may be modified by a written instrument duly executed by such parties
hereto.
8. BINDING EFFECT; ASSIGNMENT. The provisions of this Agreement shall
be binding upon and inure to the benefit of the Corporation and the Executive
and their respective successors and permitted assigns. Neither this Agreement
nor any of the rights or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other party, and any
purported assignment without such consent shall be void.
9. GOVERNING LAW. This Agreement is being executed in and shall be
governed by and construed in accordance with the laws of the state of New York,
without giving effect to conflict of laws.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
XXXXXXX XXXXXXX JEWELERS, INC.
By: /s/ XXXXXXX XXXXXXXXX
-----------------------------------
Xxxxxxx Xxxxxxxxx
Chief Executive Officer
/s/ XXXX XXXXX
-----------------------------------
Xxxx Xxxxx
